February 7, 2019 / 12:54 PM / 5 months ago

US STOCKS-Futures down as growth worries resurface

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* Futures down: Dow 0.58 pct, S&P 0.59 pct, Nasdaq 0.53 pct

By Medha Singh

Feb 7 (Reuters) - U.S. stock futures fell on Thursday as worries of slowing global growth resurfaced after the European Union cut its economic growth forecasts, while investors waited for the next breakthrough in U.S.-China trade negotiations.

The European Commission said euro zone growth will slow to 1.3 percent this year from 1.9 percent in 2018 because of an expected slowdown in the largest countries of the bloc, partly due to global trade tensions.

Global markets have been roiled by a trade war between the world’s two largest economies since early 2018, but optimism that a potential trade deal could be reached before a March 2 deadline, when additional tariffs go into effect, has helped recent gains in the markets.

The next round of trade discussions will take place in Beijing in the coming week.

The benchmark S&P 500 has surged about 9 percent this year. However, in the last two days the index has closed just below its 200-day moving average, a key technical indicator of long-term momentum, and unable to break through.

The index last fell below that level on Dec. 4.

“U.S. futures are picking up the momentum where they left off yesterday,” Naeem Aslam, chief market analyst at Think Markets UK Ltd in London, wrote in a note.

“The 200-day moving average is really putting the ceiling for the bulls and it appears that the bulls are losing ground.”

The Wall Street rally paused on Wednesday with the S&P 500 snapping a 5-day winning streak following disappointing revenue forecasts from videogame makers.

At 7:19 a.m. ET, S&P 500 e-minis were down 0.59 percent. Dow e-minis were down 0.58 percent and Nasdaq 100 e-minis were down 0.53 percent.

BB&T Corp rose 4.7 percent before the bell on buying SunTrust Banks Inc for $28.24 billion in an all-stock deal, creating the sixth largest U.S. bank based on assets and deposits. SunTrust shares jumped 8.7 percent.

Twitter Inc share fell 8.2 percent after the company forecast first-quarter revenue below Wall Street estimates and reported a drop in users for the fourth quarter.

Tapestry Inc plunged 11.6 percent after the handbag maker reported quarterly sales below Wall Street estimates, as it struggled to attract more shoppers in the crucial holiday season.

Cybersecurtiy firm FireEye Inc tumbled 9.3 percent after forecasting a surprise loss for the current-quarter, while larger rival Fortinet Inc rose 3.5 percent after posting better-than-expected quarterly results.

Fourth-quarter earnings have largely been upbeat. Of the 282 S&P 500 companies that have reported, about 70 percent have topped earnings estimates.

Late on Wednesday, Federal Reserve Chairman Jerome Powell said the U.S. economy remains in a good place.

At 8:30 a.m. ET, the Labor Department is expected to report initial claims for state unemployment benefits fell to 221,000 in the week ended Feb. 2, from 253,000 in the previous week. (Reporting by Medha Singh in Bengaluru; Additional reporting by Amy Caren Daniel; Editing by Shounak Dasgupta)

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